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Does FDI affect migration flows? The role of human capital

Author

Listed:
  • Elena D'Agosto

    (Department of Economics, University of Rome Tor Vergata, Via Columbia 2, 00133 Rome, Italy)

  • Nazaria Solferino

    (Department of Economics and Statistics, University of Calabria-UNICAL, Via Ponte Pietro Bucci, Arcavacata di Rende (CS), 86133 Italy)

  • Giovanni Tria

    (Department of Economics, University of Rome Tor Vergata, Via Columbia 2, 00133 Rome, Italy)

Abstract

Global trade and capital movements across countries are increasing along with significant international workers mobility. The aim of this paper is to analyse the link between FDI inflows and emigration waves across developing countries. We test the twofold direction that this link may follow, either through complementarity or substitution effects. By using a cross section analysis for the year 2000 with a sample including 91 developing countries, it is shown that both of them are at work While a strong positive relationship (complementarity) between migration flows and FDI arises, FDI may also be seen as a substitute for migration through direct and indirect labour demand effects. In particular, we find evidence that human capital is a channel for the substitutability effect.

Suggested Citation

  • Elena D'Agosto & Nazaria Solferino & Giovanni Tria, 2013. "Does FDI affect migration flows? The role of human capital," Migration Letters, Migration Letters, vol. 10(3), pages 359-368, September.
    • Handle: RePEc:mig:journl:v:10:y:2013:i:3:p:359-368
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    Citations

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    Cited by:

    1. Jayet, H. & Marchal, L., 2016. "Migration and FDI: Reconciling the standard trade theory with empirical evidence," Economic Modelling, Elsevier, vol. 59(C), pages 46-66.
    2. Filippo Santi & Giorgia Giovannetti & Margherita Velucchi, 2021. "Migrants know better: Migrants' networks and FDI," Working Papers - Economics wp2021_17.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    3. Xu, Xu & Sylwester, Kevin, 2016. "The effects of foreign direct investment on emigration: The roles of FDI source country, education, and gender," Economic Modelling, Elsevier, vol. 55(C), pages 401-409.

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